153 B.R. 804 (N.D.Ill. 1993), 92 C 6503, In re Lefkas General Partners No. 1017
|Citation:||153 B.R. 804|
|Party Name:||In re LEFKAS GENERAL PARTNERS No. 1017, Lefkas General Partners No. 1018, Lefkas General Partners No. 1020, Debtors. Douglas GOWAN, Appellant, v. LEFKAS GENERAL PARTNERS No. 1017, Lefkas General Partners No. 1018, Lefkas General Partners No. 1020, Glenn R. Heyman, Examiner with Expanded Powers; The Sakura Bank, Limited, Appellees. No. 92 C 6503.|
|Case Date:||April 15, 1993|
|Court:||United States District Courts, 7th Circuit, Northern District of Illinois|
[Copyrighted Material Omitted]
Douglas Gowan, Milwaukee, WI.
Norman B. Newman, Much, Shelist, Freed, Denenberg, Ament & Eiger, P.C., John Collen, Sonnenschein, Nath & Rosenthal, Chicago, IL.
MEMORANDUM OPINION AND ORDER
ZAGEL, District Judge.
This matter is before the Court, pursuant to 28 U.S.C. § 158(a), on appeal from a final order of the United States Bankruptcy Court denying appellant Gowan's application for fees or compensation for services rendered in the consolidated Chapter 11 cases of three Illinois limited partnerships known as Lefkas General Partners Nos. 1017, 1018, and 1020 ("Debtors"). A bankruptcy court's ruling regarding fees will not be disturbed on appeal absent an abuse of discretion. In re Land, 943 F.2d 1265, 1266 (10th Cir.1991) (reviewing bankruptcy court's denial of motion for nunc pro tunc approval of an application for employment of attorney). This Court also must accept the bankruptcy court's factual findings unless clearly erroneous, but review de novo any legal determinations. Id.; First Wis. Nat'l Bank v. Federal Land Bank, 849 F.2d 284, 287 (7th Cir.1988); Fed.R.Bankr. 8013. For the reasons stated below, this Court finds that Judge Ginsberg did not abuse his discretion in denying Gowan's fee application. This Court, therefore, affirms the bankruptcy court's decision.
The Debtors' general partners are members of the Demetrios Dellaportas family. The Debtors' principal asset is their beneficial interests in land trusts, which hold title to the Rivercrest Shopping Center. On October 4, 1991, the Debtors filed Chapter 11 petitions for reorganization. About a month later, Sakura Bank, Ltd. (f/k/a The Mitsui Taiyo Kobe Bank, Ltd.) filed a motion to appoint a trustee to administer the Debtors' estates. The Sakura Bank is the Debtors' major creditor (over 90% of the estates' debt) and holds the first mortgage on the Rivercrest Shopping Center. According to the Sakura Bank, a trustee was necessary because the Debtors incompetently and fraudulently diverted funds from Rivercrest, preventing them from duly investigating these fraudulent transactions and properly administering the estates.
After the Sakura Bank filed its motion, the Debtors filed an application for authority to employ the Capital Group, Inc. as a financial consultant and to pay the company a $15,000 retainer. Appellant Gowan is the President of the Capital Group. On January 21, 1992, Judge Ginsberg continued this application until resolution of the Sakura Bank's motion for appointment of a trustee, stating that appointment of new management for the Debtors was premature in light of the Sakura Bank's pending motion.
Hearings on the motion for appointment of a trustee began on that same day, January 21, 1992, after a preliminary investigation by an examiner verified the Sakura Bank's allegations of fraud. Twenty-five days of hearings followed. Finally, on April 30, 1992, the Sakura Bank and the Debtors agreed to the appointment of Glenn R. Heyman, as a special Examiner with Expanded Powers. 1 Since now the special examiner was entitled to select the financial advisors, the bankruptcy court denied as moot the Debtors' application for...
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